Winners and losers: Analysts’ top reporting season upgrades and downgrades

Patrick Commins

Analysts have been working overtime to crunch, digest and then regurgitate this season's earnings results in the form of upgrades, downgrades and revisions every which way.

With only a few days of profits left, a stocktake of analyst recommendation changes shows junior telco M2 Group has garnered the biggest jump in popularity among the broker community, know collectively as "the Street", while Tatts Group has fallen the most out of favour over the past four weeks.

Full year earnings season has analysts adjusting their outlook. Photo: Peter Braig

Bloomberg distills analyst recommendations into a single consensus opinion, measured on a scale of one to five. A score of one is a consensus "sell", a score of two is a "weak sell", three is a "hold", four is a "weak buy", and five a "buy".

Most upgraded stocks in the ASX 200 over the past four weeks

Company

Code

Last price ($)

4-wk change in reco*

Consensus reco*

Month-to-date price change (%)

M2 GROUP

MTU

7.13

0.8

4.1

17.3

OZFOREX GROUP

OFX

2.33

0.5

4.2

-5.9

REJECT SHOP

TRS

9.58

0.5

2.5

-0.8

SLATER & GORDON

SGH

6.15

0.5

4.7

23.5

SIRTEX MEDICAL

SRX

21.03

0.4

4.0

11.4

KATHMANDU

KMD

2.90

0.4

4.2

-4.0

DOMINO'S PIZZA

DMP

25.28

0.4

3.5

17.1

GOODMAN FIELDER

GFF

0.65

0.4

2.8

1.6

IINET LTD

IIN

8.08

0.4

3.6

5.9

AGL ENERGY

AGK

14.08

0.4

3.7

-0.6

On that scale M2 Group has jumped from a hold to a weak buy – a score of 4.1, as the table shows.

The next most upgraded stock is Ozforex Group, up 0.5 to 4.2, while The Reject Shop has garnered a similar boost in support from analysts, but still falls short of a hold rating.

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Plummeting in the collective analysts' esteem is Tatts Group, dropping from what would have been bordering on a buy to more like a sell following the release of what was seen as a disappointing profit result.

Troubled rare earths miner Lynas is the next most downgraded stock over the past four weeks, looking more like a sell than a hold now after it emerged in the latest production update that the company was facing a potential cash crunch this quarter.

Also among the companies facing a greater level of analyst disdain is Carsales.com. The former market darling must be feeling jilted, but the market overall remains positive – why else would it be trading at 24 times estimated earnings for this financial year?

For the record, the five most popular stocks among analysts are: Nine Entertainment (a score of 4.8), Slater & Gordon (4.7), and Seven West Media, Crown Resorts and Rio Tinto, all rating of 4.6 on the Bloomberg scale.